Full-Year Analysis: H & M Hennes & Mauritz AB

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Full-year report 2014 (1 Dec 2013 - 30 Nov 2014)

H & M Hennes & Mauritz AB
Full-year report
Full-year (1 December 2013 — 30 November 2014)


Well-received collections for all brands in the H&M Group resulted in good sales and increased market share. The H&M Group’s sales including VAT increased in local currencies by 14 percent during the financial year. Converted into SEK, sales excluding VAT amounted to
SEK 151,419 m (128,562), an increase of 18 percent.



Gross profit increased by 17 percent to SEK 89,052 m (76,025), which corresponds to a gross margin of 58.8 percent (59.1).



Profit after financial items increased by more than SEK 3.4 billion to SEK 25,895 m (22,448), an increase of 15 percent.



The Group’s profit after tax increased to SEK 19,976 m (17,093), corresponding to SEK 12.07
(10.33) per share, an increase of 17 percent.



The strong result for 2014 has led to SEK 303 m being allocated to the H&M Incentive
Program (HIP). The allocation to HIP in 2013 amounted to SEK 31 m. HIP is for all employees regardless of role, salary and whether they work part-time or full-time. The allocation to HIP was expensed in the fourth quarter. The significant difference in HIP allocations between
2014 and 2013 make it an item affecting comparability both in the full-year results for 2014 and in the fourth quarter of 2014.



Strong expansion during the year with a total net addition of 379 (356) new stores. The largest expansion markets were China and the US. At the end of the financial year the number of stores amounted to 3,511 stores in 55 markets.



More than 16,000 (12,000) new jobs were created in the H&M Group in 2014. The number of employees amounted to more than 132,000 (116,000) at the end of the year.

Sales increase +18 %

SEK 303 million is allocated to H&M Incentive Program

Fourth quarter (1 September 2014 — 30 November 2014)


The H&M Group’s sales including VAT increased in local currencies by 11 percent in the fourth quarter. Converted into SEK, sales excluding VAT amounted to SEK 42,644 m (36,495), an increase of 17 percent.



Gross profit amounted to SEK 25,774 m (22,181), an increase of 16 percent. This corresponds to a gross margin of 60.4 percent (60.8).



Profit after financial items increased to SEK 7,799 (7,259), an increase of 7 percent. Before the allocation to HIP was expensed, profit after financial items increased by 11 percent.



The Group’s profit after tax increased to SEK 6,222 m (5,549), i.e. an improvement of
12 percent, corresponding to SEK 3.76 (3.35) per share. Before the allocation to HIP was expensed, profit after tax increased by approximately SEK 900 m, i.e. an increase of
16 percent.



H&M’s first stores in Manila, the Philippines, have been very well received since opening in
October.



The Board of Directors proposes a dividend of SEK 9.75 (9.50) per share for the financial year
2013/2014.



Sales in December 2014 increased by 15 percent in local currencies compared to the corresponding month the previous year.



Sales in January 2015 are expected to increase by 14 percent in local currencies compared to the same month last year.



The H&M Group plans a net addition of around 400 new stores for the financial year
2014/2015. Most of the expansion will take place on existing markets. Taiwan, Peru, Macau,
South Africa and India will become new H&M markets in 2015.



COS and & Other Stories will open more new stores in 2015 compared with 2014.



Belgium, Bulgaria, the Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia and
Switzerland will become new H&M online markets in 2015.



H&M Beauty – a new concept with a broad range of make-up, body care and hair care products – will initially be launched in around 900 H&M stores and online in autumn 2015.

Q4

Full-year report 2014 (1 Dec 2013 - 30 Nov 2014)

Comments by Karl-Johan Persson, CEO
“2014 has been a very good year for H&M. Over the full year we increased our sales by 14 percent in local…